the next 12-18 months are going to be very tough on all large banks when it comes to mounting credit & commercial real estate losses. JPM has set-aside reserves to (in part) deal with these losses, but Citi is simply going to have a very difficult time covering their exposure in these two areas. My guess is that they will need more government money to survive this period. This one trades lower going into and then out of earnings tomorrow.
We might see 2.75 again soon. It depends on how the earnings look tomorrow. Any weakness in future prospects and we won't run up and easily could fade to under 3 again. But long term? Credit card defaults are decelerating. Manufacturing decline is decelerating. Employment losses are decelerating. C has a big revenue stream and a big crutch via TARP. I think they will make it through.
It sounds like you see the same thing coming that I do..go long once the bad news is out when C is trading much lower. If I had to establish an initial cost basis of $3.11 or south of $2.85 then I'd take the latter. Long or short doesn't that make some sense to you?
That's the difference between longs and shorts - you could win tomorrow and I don't care. Come back in 12 months to see if I've made the right call. To me, long doesn't mean buy shares today and sell them tomorrow. That's just day trading. I don't day trade.
I can not beleive what liars shorts are. The "Know nothing" as our bud on CNBC likes to say. First, Citi has 74% of it's business outside of Canada and the good ol' USA. This means that besides the obvious (less exposure to the very things all the very stupid shorts are trying to "scare us into selling" with) Citi is actually the VERY SAFEST BANK TO BE WITH OVER THE NEXT 2 YEARS! Look around and you will see overseas (China, Australia, Colombia, Brasil, etc.) are gaining in strength. Just this week alone the Colombian peso went from about 2100 to the dollar and is close to 2000 to the dollar. The dollar is LOSING the battle for strength and CITI IS RIGHT THERE getting stronger EVERY DAY! Do not bet against Royce Gracie (He can KICK serious butt in the Octagon) and do not bet against Citi! You are going to LOSE! Link
JPM did fine during 2nd Q, but the shares are lower..
its all because of CIT give it some time into todays trading session and JPM, C will close higher today.
but the big news is tmrw!! if you like risks then its your play field... If not sit aside and watch us make some money... its a good hold for a swing of 6 months.
I know that it's easy to say now, but you could see this coming during the JP Morgan conference call. Take some time to listen when other (better run) companies in the industry that you're invested in, warns about tough times. Citi was allowed to trade at $3.15-$3.18 for 25 minutes. It will go well under $3.00 guys.
On what do you base this conclusion? Where are your numbers? What is the difference in exposure to these different classes of debt? What are the differences in the capital positions? How will the conversion of preferred to common change the capital position of C?